51 Distinctive Topics in Leading Industries
The modern industrial world faces critical challenges, including addressing environmental issues such as decarbonization, improving productivity through digitalization, and fostering breakthrough innovation. The Japan Economic Federation (JEF), in collaboration with the government, supports initiatives like “Challenge Zero,” which aims to encourage innovations that enable industries and organizations to achieve zero carbon emissions. As of now, 195 companies and organizations have participated in this initiative, sharing numerous case studies on their websites.
The steel industry, responsible for the largest share of industrial carbon emissions (approximately 40%), is working on developing new steel production technologies using hydrogen to reduce emissions. Furthermore, the industry is advancing technologies to capture and separate carbon emissions generated during production.
The aviation industry is adopting Sustainable Aviation Fuel (SAF) to reduce carbon emissions by replacing a portion of traditional fuels with sustainable alternatives.
Toyota Motor has garnered significant attention by announcing its new production technology, “Giga Cast,” which significantly shortens the production process.
In January 2023, a Takashimaya department store caused a public sensation by selling a 3D-printed house as part of its New Year “good luck bag” promotion.
While most companies strive to enhance productivity by streamlining production processes and cutting costs, this shift presents significant challenges for businesses whose parts or processes are no longer needed as a result.
The household goods industry is embracing eco-friendly practices like “horizontal recycling,” which eliminates the need for new materials through advanced recycling and reuse technologies.
52 SaaS, PaaS, and IaaS: Understanding Cloud Services
Cloud services encompass systems like SaaS, PaaS, and IaaS, which allow users to access resources such as data storage, servers, and software on-demand. These services enable users to pay only for what they need, reducing costs compared to setting up an independent system development environment. The widespread adoption of cloud services has been driven by advancements in network and virtualization technologies, which replace physical hardware with digital solutions.
SaaS (Software as a Service) refers to applications that users can access via the internet without needing to install them on their devices. Examples include business-oriented software like Cybozu and expense management software like Rakus.
Similar to SaaS, there are PaaS (Platform as a Service) and IaaS (Infrastructure as a Service). PaaS provides platforms for software development, while IaaS offers networks and servers for operating information systems. Leading providers of PaaS include global giants like Amazon and Microsoft.
While cloud services offer advantages such as lower initial and maintenance costs, they also have disadvantages. These include limited customization options and restrictions on detailed security configurations. When choosing a cloud service, users must evaluate its suitability for their business needs and its ability to ensure data confidentiality and security.
53 Supply Chain
The term “supply chain” refers to the process through which products reach consumers. It encompasses a range of activities, including the procurement of materials and parts, production, logistics, and sales. This process typically involves multiple companies, such as manufacturers of parts and raw materials. Japanese manufacturers of finished goods, such as automobiles and electronic appliances, have established efficient supply chains. These systems enable the timely procurement of necessary parts by accurately predicting production requirements using advanced information systems.
Building close relationships between companies within a supply chain is a key driver of the competitiveness of Japanese businesses. A notable example is the Japanese automobile industry. The performance of a vehicle depends heavily on strict regulation and precise adjustment of every component. Producing one automobile requires approximately 30,000 components. Collaboration between automakers and parts suppliers is essential to assemble these components efficiently while maintaining high quality. This collaborative process is referred to as suriawase (exchanging views). The closer the suriawase between suppliers and automakers, the smoother the adjustment process becomes. Japanese automakers conduct detailed suriawase for each car model to ensure high quality and efficiency.
However, supply chains are undergoing changes due to several factors. The shift toward electric vehicles and the streamlining of production processes through digitalization are influencing supply chain dynamics. Additionally, the disruptions caused by the COVID-19 pandemic and security risks, such as concerns about technology transfer, have prompted some companies to diversify their production locations or relocate them back to Japan.
サプライチェーンの課題
サプライチェーンを最適化することで安定的な供給が実現し、企業の利益向上や顧客満足度の向上につながります。しかし、以下の３つの課題が発生しやすく、安定的な供給が難しい現状もあります。
グローバル化への対応
現在、少子高齢化による人手不足で、国内のみでサプライチェーンを機能させることが困難な状況です。総務省によると、2019年から2021年にかけて労働力人口が約26万人減少していることがわかりました。
予測困難なリスクへの対応
災害や経済動向などの外的要因によって供給が不安定になり、商品が消費者のもとに届かなくなることもサプライチェーンの課題の１つです。
消費者ニーズの把握
継続的に売上を出していくためには、消費者ニーズを分析・把握して、商品の品質向上や付加価値を取り入れることが大切です。しかし、サプライチェーンの取引企業同士の関係が長くなってくると、消費者ニーズよりも企業間利益を重視したサプライチェーンになることも少なくありません。
54 Company Collaboration and Cross-Industry Cooperation
Mergers and acquisitions (M&As) and corporate collaborations are becoming more prevalent due to various factors, such as changes in the competitive landscape, difficulties in securing skilled human resources, and a sense of stagnation in technological development. Corporate collaboration offers several advantages, including enhanced competitiveness through the consolidation of managerial resources. Furthermore, cooperation between industries, universities, and governments can facilitate technological progress, workforce growth, and regulatory reform.
In the global electric vehicle market, Japanese automakers are falling behind their foreign competitors. In August 2024, Honda, Nissan, and Mitsubishi announced a plan to standardize in-car software for electric vehicle control. This initiative aims to reduce development costs and introduce more efficient technologies by leveraging the combined expertise of the three companies.
In July 2024, five major food companies and an emerging robotics firm established the Futuristic Food Plant Consortium, a cooperative group dedicated to developing specialized robots for food processing plants. These highly versatile robots are expected to lower implementation costs and address labor shortages in the industry.
Resonac Corporation, a semiconductor company, played a central role in establishing US-JOINT, a business association of ten Japanese and American firms focused on improving the latter stages of semiconductor production. The association, headquartered in Silicon Valley, aims to foster smoother collaboration with American high-tech companies and is set to begin operations by the summer of 2025.Amid a once-in-a-century transformation in the automotive industry, Toyota, in partnership with SoftBank and Sony, is advancing the CASE initiative (Connected, Autonomous, Shared, and Electric).
55 Business Terms Related to Corporate Management
As Japanese businesses become more globalized, large companies are adopting international accounting standards and incorporating Western-style management practices to receive favorable evaluations from global investors. As a result, foreign loanwords are increasingly used in workplaces.
These terms are not commonly used in everyday life. However, understanding their meanings is essential for following business news. Some key terms are listed below:
CEO: This acronym stands for Chief Executive Officer, referring to the highest-ranking executive in a company. The CEO is responsible for all management decisions, including corporate strategies and policies. This title is commonly used in American-style corporate governance.
IR: This acronym stands for Investor Relations, which refers to the practice of managing communications between a company and its investors. It involves corporate public relations efforts to provide investors and shareholders with stock market information necessary for making investment decisions.
Core Competence (コアコンピタンス): This term refers to a company’s unique skill or core capability that gives it a competitive edge in the industry. For example, FUJIFILM Corporation successfully leveraged its core competence to expand into new fields such as cosmetics.
Sustainable (サスティナブル): In a business context, “sustainability” refers to managing a company in a way that contributes to building a sustainable society by addressing environmental and social issues.
CSR: This acronym stands for Corporate Social Responsibility. It refers to a company’s efforts to fulfill its responsibilities beyond legal compliance and profit generation, including making meaningful contributions to society.
Compliance (コンプライアンス): This is a fundamental principle of corporate governance. It refers to a company’s policy of conducting business in adherence to laws, ethical standards, and social norms. Given the rise in corporate scandals in recent years, compliance has become increasingly important.
IFRS: This acronym stands for International Financial Reporting Standards. In Japan, accounting standards include Japanese GAAP, U.S. GAAP, and IFRS. An increasing number of companies are transitioning to IFRS.
Stakeholder (ステークホールダー): This term refers to all individuals and groups affected by a company’s operations. Stakeholders include customers, shareholders, creditors, employees, business partners, local communities, and government agencies.
56 Stock Market Capitalization
Stock market capitalization is a measure of a company’s value. It is calculated by multiplying the stock price by the number of issued shares. When a company receives a high valuation due to announcements about revolutionary technology, valuable commodities, or initiatives to address environmental issues, its stock price rises, increasing its market capitalization. Toyota Motor was the first company in Japanese corporate history to exceed 60 trillion yen in market capitalization. It was highly valued for its excellent performance and initiatives related to production innovations, such as Giga-Cast.
57 Intangible Assets
Intangible assets refer to non-physical assets such as databases and brand value, while tangible assets include land, buildings, and machinery, among others. Intangible assets are generally classified into three categories: Digital Assets, such as software and databases; Innovative Assets, including research and development (R&D) and design; and Economic Competitiveness, which covers human capital and organizational strength. As the business world becomes increasingly digitalized, the value of intangible assets continues to grow in significance.
58 Labor Shortage Issues in Japan
As the working-age population in Japan declines, labor shortages are becoming increasingly serious. Companies struggle to secure enough human resources to fulfill their tasks, often leading to partial business shutdowns or, in the worst cases, downsizing or bankruptcy. Industries with the highest shortage of full-time employees include the information technology sector (71.9%) and the construction industry (69.5%).
Addressing labor shortages is a crucial challenge for corporate management. The Ministry of Health, Labor, and Welfare has been actively promoting workstyle reforms, such as establishing Work Style Reform Promotion Headquarters in each prefectural labor bureau. However, these efforts have not fundamentally resolved the issue.
In the construction and transportation industries, labor shortages are worsening at an accelerating pace due to reduced working hours imposed by the Workstyle Reform-Related Laws, which set upper limits on overtime. This phenomenon is known as the “2024 Problem.” Companies in these sectors are being forced to implement countermeasures such as improving business efficiency and rationalizing joint deliveries.
Even more concerning is the “2025 Problem.” By 2025, all baby boomers will be 75 or older, pushing Japan’s aging rate to an unprecedented level. As a result, labor shortages could become chronic, lowering corporate productivity and weakening Japan’s economic vitality.
Several initiatives are underway to address this crisis, including automation and labor-saving measures through artificial intelligence (AI) and robotics, reskilling workers to improve productivity, and utilizing elderly and foreign labor. To remain competitive in the global talent market, Japanese companies must reform their labor environments, including increasing wages.
59 New Work Styles in Japan
Driven by the disruptions caused by the COVID-19 pandemic and the widespread adoption of digital transformation (DX), Japanese companies have increasingly adopted new work styles such as telework and short-term (spot) work, moving away from the traditional office-based model.
Previously, Japan’s full-time labor environment was characterized by three “unlimited” aspects: unlimited work responsibilities, unlimited working hours, and unlimited work locations. However, the spread of telework during the COVID-19 pandemic led to the emergence of diverse working styles.
Some companies have abolished their relocation-based transfer systems, as telework allows employees to work without commuting to the office. According to a survey conducted by the Tokyo Metropolitan Government’s Bureau of Industrial and Labor Affairs in November 2023, 60.1% of companies with 30 or more employees in Tokyo had adopted telework. While some companies have reverted to traditional office-based work, others have made telework their standard practice.
Additionally, more companies are adopting job-type employment, in which the company and the employee agree on specific job responsibilities. Unlike Japan’s traditional employment system—based on lifetime employment and seniority—this model evaluates employees based on their individual achievements.
The number of companies permitting employees to take on side jobs is also growing, as they recognize such opportunities as beneficial for developing business skills and expanding knowledge. Moreover, spot work, a short-term working style favored by individuals who prioritize efficient time use, is becoming increasingly common.These evolving work styles encourage individuals to establish their own working preferences. Furthermore, employees will increasingly need to take a self-directed approach to career development in the future.
多様な働き方の取り組みには、テレワーク、フレックスタイム制、時差出勤制度、短時間勤務・短時間正社員、副業（複業）・兼業、ジョブ型雇用、業務委託などさまざまなアプローチがあります。
60 Childcare Leave and Work-Life Balance
Male childcare leave refers to the right of a married man to take leave to care for his child, typically under one year of age. This right is regulated by the Act on the Welfare of Workers Who Take Care of Children or Other Family Members, Including Child Care and Family Care Leave.
For many years, the rate of men taking childcare leave in Japan remained low. However, due to corporate efforts to encourage shared childcare responsibilities between spouses, the number of male employees taking childcare leave has been rising. In 2024, the rate reached a historic high of 30.1 percent. The government has implemented policies to compensate for income loss during childcare leave, and further increases in the rate are anticipated in the coming years.
The government aims to increase the rate of men taking childcare leave to 50 percent by 2025 and 85 percent by 2030. However, challenges remain, including a shortage of substitute workers during leave and instances of harassment aimed at discouraging men from taking leave.
Work-life balance (WLB) refers to a harmonious balance between work and personal life. This concept gained prominence in the West during the 1990s. In Japan, efforts are underway to create more pleasant work environments under this framework. For example, the Act on the Welfare of Workers Who Take Care of Children or Other Family Members, Including Child Care and Family Care Leavewas revised in June 2021 to introduce a new provision called “Father’s Leave After Birth,”encouraging more men to take childcare leave. Previously, childcare leave could generally only be taken once, but the revision allows it to be taken twice, regardless of gender.
Shorter working hours are believed to boost productivity. As a result, reducing working hours as part of a company’s work-life balance initiatives is expected to improve business performance.
